646 research outputs found
On the Deterrent Effect of Individual Versus Collective Liability in Criminal Organizations
Spillback Effects of Expansion When Product-Types and Firm-Types Differ
Contrary to perspectives that credit firms with only limited abilities to undertake significant change successfully, recent research has demonstrated that firms often improve their performance after undertaking major expansion to their operations. In this paper, we build on a study by Mitchell and Singh (1993) to test for differences in expansion effects, depending on whether the new goods substitute for old products and whether the firm is a generalist or specialist participant in the industry. The analysis helps us understand when a business can undertake major change successfully. The results have implications for ecological and other definitions of the core of a business and highlight the necessity for firms to undertake changes even at considerable risk to their existing operations.Peer Reviewedhttp://deepblue.lib.umich.edu/bitstream/2027.42/68398/2/10.1177_014920639502100105.pd
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Activity Overinvestment: The Case of R&D
The literature on corporate diversification has often argued for and established the case that companies often overdiversify in a product market sense – i.e. enter into unrelated product markets where they may not fully cover their cost of capital. Yet, even without engaging in unrelated diversification, managers need to make resource allocation decisions to a variety of activities that a company conducts to consummate its business. In this article we focus on Research and Development (R&D) activity and we discuss the effects that the uncertainty, boundary ambiguity, feedback latency, R&D lumpiness and legitimacy that characterize technological contexts can have in making overinvestment in R&D likely. Specifically, in this article we a) draw attention to the construct of activity overinvestment, and specifically R&D overinvestment, b) use the received literature to argue that there exists a prima facie case for examining this construct and its antecedents in order to evaluate the extent and implications of R&D overinvestment, and c) make the more general case that the resource allocation literature needs to study the issue of activity overinvestment systematically
Prospect theory and tax evasion: a reconsideration of the Yitzhaki puzzle
The standard expected utility (EUT) model of tax evasion predicts that evasion is decreasing in the marginal tax rate (the Yitzhaki puzzle). Recent literature shows cases in which incorporating prospect theory (PT) does and does not overturn the Puzzle. In a general environment that nests both PT and EUT preferences, we provide a detailed study of how the elements of PT affect the Puzzle. PT does not always reverse the Puzzle, hence we give and interpret conditions for when it does and does not. When allowing for stigma and/or variable audit probability, PT reverses the Puzzle in the same way and with the same limitations as does EUT, if equally augmented
The Size Effect in Value and Momentum Factors: Implications for the Cross-Section of International Stock Returns
Predicting Extreme Returns and Portfolio Management Implications
We consider which readily observable characteristics of individual stocks (e.g., option implied volatility, accounting data, analyst data) may be used to forecast subsequent extreme price movements. We are the first to explicitly consider the predictive influence of option implied volatility in such a framework, which we unsurprisingly find to be an important indicator of future extreme price movements. However, after controlling for implied volatility levels, other factors, particularly firm age and size, still have additional predictive power of extreme future returns. Furthermore, excluding predicted extreme return stocks leads to a portfolio that has lower risk (standard deviation of returns) without sacrificing performance
Search, Seizure and (False?) Arrest: An Analysis of Fourth Amendment Remedies when Police can Plant Evidence
The Diffusion of Complex Market Technologies: Multifaceted Dynamics for Alternative Fuel Vehicles
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